Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended September 30, 2017 of $5,719,000 (or $1.33 per share diluted) compared to net income of $6,094,200 (or $1.41 per share diluted) in the third quarter of 2016. For the nine months ended September 30, 2017, net income was $16,908,600 (or $3.83 per share diluted) compared to net income of $16,051,400 (or $3.72 per share diluted) for the same period last year.

The Company experienced royalty growth driven primarily by increased sales from franchisees, while profits in the leasing business were lower when compared to last year due to a decrease in customer activity within the lease portfolio. Brett D. Heffes, Chief Executive Officer, commented, “We are pleased with the performance of the franchising business during the quarter, and the response to Winmark Franchise Partners, which we have continued to invest in during the quarter, has been extremely positive.”

Winmark Corporation creates, supports and finances business. At September 30, 2017, there were 1,210 franchises in operation under the brands Plato's Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore® and Music Go Round®. An additional 62 retail franchises have been awarded but are not open. In addition, at September 30, 2017, the Company had a lease portfolio of $40.6 million.

This press release contains forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to future events or the future financial performance of the Company. Such forward-looking statements are only predictions or statements of intention subject to risks and uncertainties and actual events or results could differ materially from those anticipated. Because actual result may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.

  WINMARK CORPORATION CONDENSED BALANCE SHEETS

(unaudited)

            September 30, 2017 December 31, 2016 ASSETS Current Assets: Cash and cash equivalents $ 1,060,700 $ 1,252,900 Marketable securities — 199,900 Receivables, net 1,708,100 1,479,200 Restricted cash 40,000 40,000 Net investment in leases - current 16,311,000 17,004,800 Income tax receivable 1,721,500 1,678,800 Inventories 67,000 87,500 Prepaid expenses   865,400     1,050,700   Total current assets 21,773,700 22,793,800   Net investment in leases – long-term 24,249,500 24,410,700 Property and equipment, net 547,700 769,600 Goodwill   607,500     607,500   $ 47,178,400   $ 48,581,600     LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) Current Liabilities: Notes payable, net $ 3,236,100 $ 1,990,000 Accounts payable 1,474,600 1,692,000 Accrued liabilities 2,906,100 1,811,100 Deferred revenue   1,649,300     1,864,700   Total current liabilities 9,266,100 7,357,800   Long-Term Liabilities: Line of credit 41,900,000 23,400,000 Notes payable, net 29,650,100 19,926,500 Deferred revenue 1,458,200 1,423,800 Other liabilities 808,400 993,600 Deferred income taxes   3,485,300     3,331,900   Total long-term liabilities 77,302,000 49,075,800   Shareholders’ Equity (Deficit):

Common stock, no par, 10,000,000 shares authorized, 3,821,528 and 4,165,769 shares issued and outstanding

— 2,976,100 Accumulated other comprehensive income (loss) — (9,900 ) Retained earnings (accumulated deficit)   (39,389,700 )   (10,818,200 )     Total shareholders’ equity (deficit)   (39,389,700 )   (7,852,000 ) $ 47,178,400   $ 48,581,600       WINMARK CORPORATION CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

                        Quarter Ended     Nine Months Ended September 30, 2017     September 24, 2016     September 30, 2017     September 24, 2016 REVENUE:         Royalties $ 12,316,700 $ 11,311,000 $ 33,865,100 $ 32,140,800 Leasing income 3,915,800 4,174,000 13,722,000 12,839,000 Merchandise sales 773,100 520,000 2,058,500 1,882,400 Franchise fees 317,800 501,800 1,262,500 1,367,800 Other   244,500     227,500     1,033,100     984,400   Total revenue 17,567,900 16,734,300 51,941,200 49,214,400 COST OF MERCHANDISE SOLD 728,300 499,100 1,942,400 1,784,800 LEASING EXPENSE 792,000 646,200 2,724,000 2,010,400 PROVISION FOR CREDIT LOSSES (13,300 ) (29,700 ) (26,200 ) (52,000 ) SELLING, GENERAL AND ADMINISTRATIVE EXPENSES   6,208,900     5,180,700     19,179,400     17,671,500   Income from operations 9,852,000 10,438,000 28,121,600 27,799,700 INTEREST EXPENSE (613,900 ) (552,300 ) (1,559,300 ) (1,786,800 ) INTEREST AND OTHER INCOME (EXPENSE)   28,000     (6,300 )   29,900     (7,300 ) Income before income taxes 9,266,100 9,879,400 26,592,200 26,005,600 PROVISION FOR INCOME TAXES   (3,547,100 )   (3,785,200 )   (9,683,600 )   (9,954,200 ) NET INCOME $ 5,719,000   $ 6,094,200   $ 16,908,600   $ 16,051,400   EARNINGS PER SHARE – BASIC $ 1.42   $ 1.48   $ 4.09   $ 3.90   EARNINGS PER SHARE – DILUTED $ 1.33   $ 1.41   $ 3.83   $ 3.72   WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC   4,024,692     4,116,957     4,131,269     4,113,819   WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED   4,314,412     4,328,168     4,416,185     4,320,284    

Winmark CorporationBrett D. Heffes, 763-520-8500

Winmark (NASDAQ:WINA)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Winmark Charts.
Winmark (NASDAQ:WINA)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Winmark Charts.